Council OKs Kane tower project in downtown Raleigh

A sprawling, decrepit warehouse in downtown Raleigh will soon be transformed into a 17-story tower that many see as a catalyst for development on the west side of downtown.

The Raleigh City Council on Tuesday unanimously approved a request by Raleigh-based Kane Realty to rezone 2.5 acres between South West Street and South Harrington Street. The move allows the company to build a $150 million mixed-use project that includes a commercial tower and residential building up to nine stories tall.

Kane Realty CEO John Kane said the company hopes to finish the project by the end of 2017 – the same year local authorities plan to open the Union Station transit hub just one block away.

The company needs another six months to complete the design process with Durham-based architect Duda Paine, and another 18 months for construction, he said.

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Kane thinks his project will transform the district and generate more development momentum in a trendy, up-and-coming area that’s already home to Citrix and HQ Raleigh.

“We have looked at a number of things downtown and have been wanting to do something for quite some time,” he said. “We’re very excited.”

The council’s vote, which occurred swiftly and without discussion, ended two months of negotiations between Kane and Councilwoman Kay Crowder, who was concerned the company’s initial proposal didn’t live up to policy recommendations for the area.

Crowder had more influence than usual in this case because three council members recused themselves from the approval process – leaving Crowder and four other councilors to consider a case that needed five yes votes for approval.

Council members Bonner Gaylord, Wayne Maiorano and Russ Stephenson abstained from discussions because they have ties to Kane Realty. Crowder – who was appointed to the council last year after councilman Thomas Crowder, her husband, passed away – was the only council member to publicly express concerns.

She called on the company to include more retail space on its West Street façade because it will face Union Station. Kane obliged Crowder’s request when he submitted a revised plan to the city last month, simultaneously making the project consistent with city policies.

The revised plan also restricts the use of certain building materials and preserves the “Dillon Supply Co. Steel and Pipe Products” sign on the warehouse that currently occupies the site, conditions Crowder sought. Kane’s initial proposal would have allowed the company to replace the sign if it was damaged during construction.

“I do think it’s going to be an excellent project,” Crowder said after the vote.

The project includes 200,000 to 300,000 square feet of office space, more than 250 residential units and 15,000 to 20,000 square feet of retail.

Kane estimated the project could house six to nine retail tenants, depending on how much space each needs.

The company has talked to two companies interested in office space and several groups interested in retail and restaurant space, he said.

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Bars and nightclubs will not be part of the project, since Kane promised to prohibit them at the request of some area residents who are concerned about nighttime noise.

The project is, however, likely to provide much-needed parking in the district. Kane plans to build a parking deck with 850 to 950 spaces as part of the project.

The city is considering buying some of those spaces to make available to the public. The council Tuesday set a public hearing on Oct. 7 on a tentative deal with Kane to buy up to 350 spaces at $32,500 per space.

The city could spend $8.1 million to $11.3 million, depending on how many spaces it buys.

The Raleigh Report is your one-stop shop for everything Raleigh. Check here for the latest on city government, planning, the arts, roads, Falls Lake, events and more. This blog is updated by staff writers Paul A. Specht and Mechelle Hankerson.